Having been passed by both Houses of the Oireachtas, Part V of the
Planning and Development Bill, 1999, was referred to the Supreme Court
by the President pursuant to Article 26 of the Constitution of Ireland,
1937.

Section 94 of the Planning and Development Bill, 1999, provides,inter alia, for the inclusion by planning authorities in any
development plan of a housing strategy which shall take into account the
existing need and the likely future need for housing, the need to ensure
that housing is available for persons who have different levels of
income, the need ensure a mixture of housing and the need to counteract
undue segregation in housing between persons of different social
backgrounds. A housing strategy shall provide that as a general policy a
percentage of land developed for residential use, shall be reserved for
the provision of affordable housing.

Section 95 provides, inter alia, that the planning
authority shall ensure that sufficient and suitable land is zoned for
residential use to meet the requirements of the housing strategy and to
ensure that a scarcity of such land does not occur during the period of
the development plan. The planning authority shall include objectives in
the development plan to secure the implementation of the housing
strategy.

Section 96 provides, inter alia, that where a person applies
for permission for the development of houses or a mixture of
developments, including housing on land which was zoned for residential
use, or a mixture of residential and other uses, and the planning
authority has included an objective in the development plan requiring a
specified percentage of it to be made available for affordable housing,
the planning authority, may require as a condition of a grant of
permission that the applicant enter into an agreement with the planning
authority. The agreement may provide for the transfer to the planning
authority of the ownership of land required to be reserved for the
provision of housing, the building and transfer of houses, or the
transfer of sites. Where ownership of land is transferred to a planning
authority, the planning authority shall pay compensation equal to either
the price paid for the land, together with interest, the market value of
the land or the value of the land calculated by reference to its
existing use on the date of transfer of ownership depending on the date
and circumstances whereby the applicant became the owner of the land.

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Section 97 provides for the application to the planning authority for a
certificate that the provisions of s. 96 did not apply to certain
developments.

Section 98 provides for the allocation of affordable housing and
provides that affordable housing may be sold or leased only to eligible
persons who qualified in accordance with a scheme established by the
planning authority.

Section 99 provides for the control of resale of houses.

Held by the Supreme Court (Keane C.J., Murphy, Murray,
McGuinness and Geoghegan JJ.), in deciding that Part V of the Bill was
not repugnant to the provisions of the Constitution, 1, that the
objective of Part V of the Bill was to provide affordable housing and
was within the competence of the Oireachtas to attain by the use of
planning legislation.

2. That every person who acquired or inherited land took it subject to
any restrictions which the general law of planning imposed on its use in
the public interest. The availability of planning permission might
depreciate or enhance the value of the land.

3. That, imposing a condition of obtaining planning permission for the
development of land for residential purposes whereby the owner was
required to cede some part of the enhanced value of the land, derived
from its zoning for residential purposes and the grant of permission, in
order to provide affordable housing, was an objective of sufficient
importance to warrant interference with a constitutionally protected
right and impaired that right as little as possible and was
proportionate to the objective.

5. That the scheme could not be regarded as arbitrary, unfair or based
on irrational considerations. It was reasonable to differentiate between
persons who bought their land before and after the Bill had been passed.
It was not unfair or arbitrary to distinguish between those who acquired
their land by purchase or inheritance before the Bill was passed.

6. That Article 40 of the Constitution did not preclude the Oireachtas
from enacting legislation based on any form of discrimination. Where
classifications were made by the Oireachtas for a legitimate legislative
purpose, were relevant to that purpose and treated each class fairly,
they were not constitutionally invalid. The Oireachtas had met those
requirements and Part V of the Bill was not repugnant to Article 40 of
the Constitution.

7. That the general policy of Part V of the Bill was to provide
affordable housing to eligible persons and the Oireachtas was entitled
to allow additional matters relating to particular applicants to be
dealt with at the discretion of the planning authorities or the Minister
for the Environment. Part V of the Bill was not repugnant to Article
15.2 of the Constitution.

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S.C.

Reference pursuant to Article 26 of the Constitution.

The Planning and Development Bill, 1999, was passed by the
Oireachtas on the 21st June, 2000. On the 30th June, 2000, the President
of Ireland referred Part V of the Bill to the Supreme Court pursuant to
the provisions of Article 26.1.1 of the Constitution of Ireland, 1937,
for a decision as to whether the provisions of Part V of the Bill, or
any of them, were repugnant to the provisions of the Constitution. The
relevant sections of the Bill are set out in full in the judgment of the
Court, infra.

On the 4th July, 2000, the Supreme Court assigned solicitor and
counsel to be heard in argument against the constitutionality of the
Bill.

On the 24th, 25th and 26th July, 2000, the Supreme Court (Keane C.J.,
Murphy, Murray, McGuinness and Geoghegan JJ.) heard argument from
counsel assigned by the court to oppose the Bill and from the Attorney
General.

James Connolly S.C.
and
Paul Gallagher S.C.
(with them
Nuala Butler
)assigned to argue against the Bill.

The Attorney General
and
Donal O'Donnell S.C.
(with them
Brian Murray
) in support of the Bill.

Cur. adv. vult.

Pursuant to the provisions of Article 26.2.2 of the Constitution, the
decision of the Court was pronounced by a single member.

Keane C.J.

28th August, 2000

This is the decision of the Supreme Court on the reference to it by the
President of Part V of the Planning and Development Bill, 1999,
pronounced pursuant to Article 26.2.1 of the Constitution.

The Reference

By order given under her hand and seal on the 30th June, 2000, the
President, after consultation with the Council of State, referred, in
pursuance of the provisions of Article 26 of the Constitution, Part V of
the Bill to the Supreme Court for a decision on the question as to
whether the said Part V or any provision or provisions thereof is or are
repugnant to the Constitution or to any provision thereof.

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Proceedings on the reference

Counsel were assigned by the court to present arguments on the question
referred to the court by the President. Prior to the oral hearing,
counsel assigned by the court presented written submissions to the
court, including submissions that certain provisions of Part V of the
Bill were repugnant to the Constitution. Submissions in writing by and
on behalf of the Attorney General were presented to the court, including
submissions that none of the provisions of Part V were repugnant to the
Constitution.

The oral hearing then took place before the court on the 24th and 25th
July, 2000. During the course of the hearing, the court heard oral
submissions by counsel assigned by the court and by the Attorney General
and counsel appearing with him.

The scheme of Part V of the Bill

Before the detailed provisions of Part V are referred to, it might be
helpful to summarise what appear to be the main features of the
statutory scheme which it purports to establish.

It is clear that the purpose of the statutory scheme is to facilitate
the purchase of houses by people who would otherwise not be in a
position to buy houses and to ensure, so far as possible, that housing
developments of this nature are not isolated from the general community.

This is sought to be achieved through the planning mechanism. Each
planning authority is to include in its development plan a "housing
strategy". It is envisaged that this will provide for the designation
within the area of a planning authority of a specified percentage of the
lands zoned for residential use for the provision of what is called"affordable housing" and also for the provision of housing for persons
coming within certain defined categories, such as, for example, the
homeless, travellers and people living in unfit or overcrowded
accommodation.

Where the owner of land zoned for residential uses, or a mixture of
residential and other uses, applies for permission for a housing
development on the land, the planning authority, or An Bord Pleanála, as
a condition of granting the permission may require him to enter into an
agreement under which he either cedes up to 20% of the land comprising
the development for such purposes or provides serviced sites or houses
actually built for such purposes.

The price for such land to be paid by the planning authority is to be
calculated by reference to its existing use value, i.e. on the
assumption that no development other than exempted development would be
allowed on the land. In the case of land purchased before the
publication of the Bill,

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the landowner will be entitled to be paid the
sum he actually paid for the land, if it is higher than the existing use
value. There are also provisions for the payment of interest. In the
case of land acquired by inheritance or gift before the publication of
the Bill, he will be entitled to its value as of the date of the death
or the gift, if that is higher than the existing use value.

Developments consisting of the provision of four or fewer houses or for
housing on land of 0.2 hectares or less are not affected by these
provisions. There are also provisions enabling the planning authority to"claw back" a percentage of the profits made by persons to whom
such housing is allocated in the event of a resale.

Part V of the Bill

The long title of the Bill describes it as:-

"An Act to revise and consolidate the law relating to planning and
development by repealing and re-enacting with amendments the Local
Government (Planning and Development) Acts, 1963 to 1999; to provide, in
the interests of the common good, for proper planning and sustainable
development including the provision of housing; to provide for the
licensing of events and control of funfairs; to amend the Environmental
Protection Agency Act, 1992, the Roads Act, 1993, the Waste Management
Act, 1996, and certain other enactments; and to provide for matters
connected therewith."

Section 94 of the Bill deals with what are described in Part V as"Housing Strategies". It requires every planning authority to
include in the development plan it is required to make under s. 12 of
the Bill:-

"a strategy for the purpose of ensuring that the proper planning and
sustainable development of the area of the development plan provides for
the housing of the existing and future population of the area in the
manner set out in the strategy."

Subject to certain qualifications, any development plan made by a
planning authority is to include a "housing strategy".

A housing strategy must take into account the existing and likely future
need for housing of the following categories of person (hereafter"the special categories"):

(a) the homeless;

(b) travellers;

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(c) those living in accommodation that is unfit for human habitation or
materially unsuitable for their adequate housing;

(g) those in need of accommodation for medical or compassionate reasons;

(h) the elderly;

(i) the disabled or handicapped; and

(j) those, who in the opinion of the housing authority, are not
reasonably able to meet the cost of the accommodation which they are
occupying or to obtain suitable alternative accommodation.

In making any assessment for the purpose of these provisions, the
relevant housing authority must have regard to such directions as may be
given from time to time by the Minister of the Environment.

The housing strategy must also take into account the existing and likely
future need for what is described as "affordable housing". That
is defined by s. 93(1) as houses or land made available for "eligible
persons". They, in turn, are defined as follows:-

"Subject to subsection (3) and to the regulations, if any, made by
the Minister under section 100(1)(b), a person who is in need of
accommodation and whose income would not be adequate to meet the
payments on a mortgage for the purchase of a house to meet his or her
accommodation needs because the payments calculated over the course of a
year would exceed 35 per cent of that person's annual income net of
income tax and pay related social insurance."

Section 94(3) provides that the housing strategy must also take into
account:-

"(b) the need to ensure that housing is available for persons who
have different levels of income;

(c) the need to ensure that a mixture of house types and sizes is
developed to reasonably match the requirements of the different
categories of households, as may be determined by the planning
authority, and including the special requirements of elderly persons and
persons with disabilities, and

(d) the need to counteract undue segregation in housing between
persons of different social backgrounds."

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A housing strategy must include an estimate of the amount of housing
for the persons in the special categories and affordable housing
required in the area of the development plan during the period of the
development plan. The estimate may state different requirements for
different areas within the area of the development plan. The planning
authority may exclude eligible persons who have previously owned a
house.

The housing strategy must provide that as a general policy a specified
percentage, not being more than 20% of the land zoned for residential
use, or for a mixture of residential and other uses, shall be reserved
for the provision of housing for the special categories or for
affordable housing. However, this is not to prevent any person
(including a local authority) from using more than 20% of such land for
residential use, or for a mixture of residential and other uses, for the
provision of housing for such purposes.

In making the estimate of the amount required for affordable housing,
the planning authority must have regard to the following matters set out
in section 94 (5)(a):-

"(i) the supply of and demand for houses generally, or houses of a
particular class or classes, in the whole or part of the area of the
development plan;

(ii) the price of houses generally, or houses of a particular class or
classes, in the whole or part of the area of the development plan;

(iii) the income of persons generally or of a particular class or
classes of person who require houses in the area of the development
plan;

(iv) the rates of interest on mortgages for house purchase;

(v) the relationship between the price of housing under subparagraph
(ii), incomes under subparagraph (iii) and rates of interest under
subparagraph (iv) for the purpose of establishing the affordability of
houses in the area of the development plan;

(vi) such other matters as the planning authority considers appropriate
or as may be prescribed for the purposes of this subsection."

Section 95 contains provisions requiring the planning authority to
ensure that sufficient suitable land is zoned for residential use, or
for a mixture of residential and other uses, to meet the requirements of
the housing strategy, and to ensure that a scarcity of such land does
not occur at any time during the period of the development plan. It also
provides that, in order to counteract what is described as "undue
segregation in housing between persons of different social
backgrounds", the planning authority may indicate in respect of any
particular area that is zoned for residential

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use, or a mixture of
residential and other uses, that there is no requirement for housing for
the special categories or for affordable housing or that a lower
percentage than that specified in the housing strategy may be required
instead.

Section 96 provides that, where a development plan objective requires
that a specified percentage of any land zoned solely for residential
use, or for a mixture of residential and other uses, is to be made
available for housing for the special categories or for affordable
housing, the remaining provisions of the section are to apply to an
application for permission for the development of houses, or where an
application relates to a mixture of development, that part of the
application which relates to the development of houses. This is to be in
addition to the provisions of s. 34 of the Bill which sets out the
powers and duties of the planning authority in relation to the granting
or refusal of permission for the development of land and the conditions
which may be attached to such permissions.

The effect of s. 96 can be summarised as follows. Where a person applies
for permission for the development of houses or a mixture of
developments, including housing, on land which is zoned for residential
use, or a mixture of residential and other uses, and the planning
authority have included an objective in the development plan requiring a
specified percentage of it to be made available for housing for the
specified categories or affordable housing, the planning authority, or
An Bord Pleanála, may require as a condition of a grant of permission
that the applicant enter into an agreement of a specified nature with
the planning authority.

The agreement in question may take one of three forms. First, it may
provide for the transfer to the planning authority of the ownership of
the land required by the agreement to be reserved for the provision of
housing for the specified categories or affordable housing. Secondly, it
may provide for the building of a specified number of houses of a
particular description and their transfer to the planning authority or
persons nominated by the planning authority at a price to be determined
in accordance with the provisions of the section. Thirdly, it may
provide for the transfer of a specified number of fully or partially
serviced sites to the planning authority, or persons nominated by the
planning authority, at a price to be determined in accordance with the
provisions of the agreement.

The applicant cannot be required to enter into an agreement to transfer
houses or sites. He may opt instead to transfer land and, it is only
where he decides not to transfer land, that he can be required to enter
into an agreement to transfer houses or sites.

The price of houses and sites to be transferred under the agreement is
to be determined on the basis of the site cost of the houses being
calculated as if it was equal to the cost of land transferred to the
authority under the

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first procedure and the building and attributable
development costs, as agreed between the authority and the developer,
including profit on the cost.

For the purposes of such an agreement, the planning authority must have
regard to:-

"(i) the proper planning and sustainable development of the area to
which the application relates,

(ii) the housing strategy and the specific objectives of the development
plan which relate to the implementation of the strategy;

(iii) the need to ensure the overall coherence of the development to
which the application relates,

(iv) the views of the applicant in relation to the impact of the
agreement on the development."

The applicant must, when making an application to which s. 96 applies,
specify the manner in which he or she would propose to comply with the
condition requiring an agreement to be entered into were the planning
authority to attach such condition. Where the authority grants the
permission to the applicant subject to such condition, it must have
regard to the proposals he has made.

Where ownership of any land is transferred to a planning authority in
pursuance of an agreement of the first type, the compensation payable to
the owner is to be assessed as follows. Where the land was purchased by
the applicant before the 25th August, 1999, (the date of publication of
the Bill), he is entitled to be paid whichever of these two sums is the
greater:-

(a) the price actually paid for the land together with a sum in respect
of interest to be determined by a property arbitrator (including
interest in respect of a mortgage);

(b) the value of the land calculated by reference to its existing use on
the date of the transfer on the basis that on that date and thereafter
it would have been unlawful to carry out any development on the land
other than exempted development (hereafter the "existing use" value).

Similar provisions apply where the land was purchased before the 25th
August, 1999, by the applicant pursuant to an enforceable agreement
entered into before that date or an exercise of an option in writing
granted or acquired before that date. There are also similar provisions
where the applicant is a mortgagee in possession of land purchased
before the 25th August, 1999.

Where the land was acquired by the applicant by way of a gift or
inheritance before the 25th August, 1999, he is to be entitled to a sum
equal to the market value of the land on the valuation date estimated in
accordance

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with s. 15 of the Capital Acquisitions Tax Act, 1976, or the
existing use value, whichever is the greater. The valuation date under
s. 21 of the Act of 1976, is the date of the gift or the death of the
person from when the land is inherited.

In the case of any other land - i.e. land acquired after the
25th August, 1999 - the applicant is to be entitled only to its existing
use value calculated on the basis already indicated.

Where because of the size, shape or "other attributes of the
site", the planning authority, or An Bord Pleanála on appeal,
considers that an agreement under these provisions is not practical, the
planning authority or An Bord Pleanála may as a condition of a grant of
permission require the payment of the planning authority of an amount
equivalent in value to a transfer of the land to the authority under
those provisions. Any amount paid under this provision is to be
accounted for in a separate account and may only be applied by a
planning authority as capital for its functions under Part V or by the
housing authority for its functions in relation to the provision of
housing under the Housing Acts, 1966 to 1998.

The following matters, in default of agreement, are to be determined in
accordance with the Acquisition of Land (Assessment of Compensation)
Act, 1919, by a property arbitrator appointed under the relevant
legislation:-

(1) the number and price of the houses and sites to be transferred under
the second and third procedures;

(2) the compensation payable to the owner of the land under the first
procedure;

(3) the sum payable to the planning authority where an agreement is not
practical.

Any other disputes in relation to any matter which may be the subject of
an agreement under these provisions may be referred by the planning
authority or any other prospective party to the agreement to An Bord
Pleanála for determination. Where it is a condition of the granting of
permission that such an agreement is to be entered into and, because of
a dispute in respect of any matter relating to the agreement, it is not
entered into before the expiration of eight weeks from the date of the
grant of permission, the applicant or any other person with an interest
in the land which the application relates may refer the dispute to An
Bord Pleanála or a property arbitrator, whichever is appropriate.

Where the ownership of lands or sites is transferred to a planning
authority in accordance with these provisions, the authority may

(i) provide, or arrange for the provision of houses on the land or sites
for the specified categories or for affordable housing,

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(ii) make land or sites available to the same persons for the
development of houses by them for their own occupation, or

(iii) make land or sites available to a body approved for the purposes
of s. 6 of the Housing Miscellaneous (Provisions) Act, 1992, for the
provision of houses on the land for the specified categories or for
affordable housing.

Pending such provision, the planning authority is required to maintain
the land or sites in a manner which does not detract, and is not likely
to detract, to a material degree from the amenity, character or
appearance of land or houses in the neighbourhood of the land or sites.

Where a planning authority becomes satisfied that land, sites or a house
transferred to it under these provisions is no longer required for the
purposes mentioned in the last paragraph, it may use the land, site or
house for another purpose connected with its functions or sell it for
the best price reasonably obtainable. In either case, it must pay an
amount equal to the market value of the land, site or house or the
proceeds of sale into the separate account to which reference has
already been made.

These provisions are not to apply to applications for permission for
development consisting of the provision of houses by a body approved for
the purposes of s. 6 of the Housing (Miscellaneous Provisions) Act,
1992, for the provision of housing for persons in the specified
categories where such houses are to be made available for letting only.
Nor is it to apply to the conversion of an existing building or the
reconstruction of a building to create one or more dwellings, provided
that 50% or more of the existing external fabric of the building is
retained. It is also not to apply to the carrying out of works to an
existing house.

The section provides that a permission granted under Part IV of the
Local Government (Planning and Development) Act, 1963, (proposed to be
repealed and replaced by the Bill) or under the corresponding provisions
of the Bill pursuant to an application made after the 25th August, 1999,
and to which Part V would have applied if the application for permission
had been made after the inclusion of a housing strategy in the
development plan, is to cease to have effect on the 31st December, 2002,
or on the expiry of a period of two years from the date of the grant of
permission which ever is the later. This will apply to the entire
development, where the development to which the permission relates is
not commenced by that date or the expiry of that period. Where the
development has commenced by that date or before the expiry of the
period, it is to apply to any portion of the development consisting of
buildings the external walls of which have not been completed. This
latter provision is stated to be without prejudice to the obligation on
the person carrying out the development to

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fulfill the other
requirements of the permission in relation to so much of the development
as is not affected by these provisions.

Section 97 provides that the section just dealt with (s. 96) is not to
apply to development

(a) consisting of the provision of four or fewer houses, or

(b) for housing on land of 0.2 hectares or less,

provided the requirements of the section are met. The person seeking
exemption under this section must obtain from the planning authority a
certificate stating that s. 96 is not to apply to a grant of permission
in respect of the development concerned. An application for the
certificate must be accompanied by a statutory declaration made by the
applicant setting out the following information:-

(a) in respect of the period of five years preceding the application
particulars of the legal and beneficial ownership of the land that is
within the applicant's knowledge or procurement;

(b) the names of any persons with whom the applicant is acting in concert;

(c) particulars of any interest that the applicant or any person with
whom he is acting in concert has in land in the immediate vicinity, i.e.
land that is not more than four hundred metres away;

(d) a statement that the applicant is not aware of any facts or
circumstances that would constitute grounds for a refusal of a
certificate;

(e) such other information as may be prescribed by the Minister.

A planning authority cannot grant a certificate where the applicant, or
any person with whom he is acting in concert

(a) has been granted, not earlier than five years before the date of the
application, a certificate in respect of the development and the
certificate remains in force;

(b) has carried out a development to which the section applies not
earlier than five years before the date of the application and one year
after the coming into operation of the section in respect of the land or
land in the immediate vicinity. This is not to apply where the aggregate
of any such development and the first mentioned development would not,
if carried out, exceed four houses or

(2) where it would exceed four houses, the aggregate of the land the
subject of any such development and the land on which it is proposed to
carry out the first mentioned development does not exceed 0.2 hectares.

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Where the planning authority refuses to grant a certificate, it must
inform the applicant by notice in writing of its reasons for so
refusing. The applicant is then entitled, not later than three weeks
from the date of the notification of refusal, to appeal to the Circuit
Court for an order directing the planning authority to grant the
applicant the certificate. (The time for appealing may be extended by
the court). The court may either dismiss the appeal and affirm the
refusal of the planning authority or allow the appeal and direct the
planning authority to grant the applicant a certificate and, if the
latter course is adopted, the planning authority must comply with the
direction.

There are also provisions enabling the planning authority to revoke a
certificate on an application to that effect by the owner of the land or
a person acting with his permission, but may not do so where permission
has been granted in respect of the development.

Finally, the section contains criminal sanctions where a person
knowingly or recklessly makes a false or misleading statutory
declaration or provides the planning authority with false or misleading
information or documentation. There are also such sanctions in respect
of the forgery of certificates under the section.

Section 98 provides for the allocation of affordable housing. Under its
provisions, a planning authority must establish a scheme which
determines the order of priority to be accorded to eligible persons.
Without prejudice to the generality of these provisions, the planning
authority in establishing such a scheme are to have regard to the
following:-

"(a) the accommodation needs of eligible persons, in particular
eligible persons who have not previously purchased or built a house for
their occupation or for any other purpose;

(b) the current housing circumstances of eligible persons;

(c) the incomes or other financial circumstances of eligible persons
(and priority may be accorded to eligible persons whose income level is
lower than that of other eligible persons);

(d) the period for which eligible persons have resided in the area of
the development plan;

(e) whether eligible persons own houses or lands in the area of the
development plan or elsewhere;

(f) distance of affordable housing from places of employment of
eligible persons;

(g) such other matters as the planning authority considers appropriate
or as may be prescribed for the purposes of this section."

The planning authority may review a scheme made under the section and
make amendments to it or a new scheme and must carry out such a

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review,
when making or reviewing a development plan under Part II of the Bill.

Section 99 enables the planning authority to impose controls on the
resale of houses or sites provided or made available by them under these
provisions. The sale or lease of the houses or sites are to be subject
to such conditions as may be specified by the planning authority and,
without prejudice to the generality of that provision, they may provide
for

(a) the notification of the planning authority of the resale of any
house or land;

(b) the basis on which any house sold or leased under the provisions in
question may be occupied.

The terms and conditions imposed by the planning authority must include
a condition that, where any house or land sold to any person under these
provisions is first resold before the expiration of twenty years from
the date of purchase, the person selling the house or land is to pay to
the planning authority out of the proceeds of the sale a specified
percentage of those proceeds. If, for example, the house or site is sold
by the planning authority to a person for £75,000 but its market value
is £100,000, the person on a resale must pay 25% of the proceeds to the
planning authority. That amount, however, is to be reduced by 10% in
respect of each complete year after the tenth year during which the
person to whom the house or land was sold has been in occupation of it
as his normal place of residence.

Where the amount payable to the planning authority under these
provisions would reduce the proceeds of the sale (disregarding
solicitors' and estate agents' fees and costs) below the price actually
paid, the amount payable shall be reduced to the extent necessary to
avoid that result. Thus, in the example given, if the house were resold
for £90,000, the amount payable out of the proceeds of sale would be
£15,000 and not £25,000.

In calculating the amount payable to the planning authority under these
provisions, due allowance is to be made for any "material
improvements" made by the person to whom the house or land is sold.
That does not include decoration or any improvements carried out on the
land, including the construction of a house. In default of agreement,
the amount is to be fixed under the arbitration procedures to which
reference has already been made.

Monies accruing to a planning authority from such a resale are to be
paid into the separate account to which reference has already been made
and are to be subject to the requirements in relation to that account
already mentioned.

Section 100 provides for the making of regulations by the Minister:-

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"(a) specifying the criteria for determining the size of the
accommodation required by eligible persons, including minimum and
maximum size requirements, having regard to any guidelines specified by
the Minister in respect of the provision of housing under the Housing
Acts, 1966 to 1998;

(b) governing the determination of income for the purposes of
section 93;

(c) specifying matters for the purposes of section 94(5) or 98(3),
and

(d) setting out requirements related to terms and conditions referred to
in section 99(1)."

The matters referred to in s. 94(5) are those which may be the subject
of an agreement under s. 94 and which, in the event of a dispute, may be
referred by the planning authority or any other prospective party to the
agreement to An Bord Pleanála for determination.

Section 100(2) provides that regulations made under subs. (1) may apply
either generally or by reference to a specified class or classes of
eligible persons or to any other matter as may be considered by the
Minister for the Environment to be appropriate.

Section 101 provides that, where a planning authority performing any
function under Part V is not the housing authority for the area for the
function, it is to consult with the housing authority for the area with
respect to the performance of that function.

Arguments by counsel assigned by the Court

Counsel assigned by the court submitted that certain provisions of Part
V of the Bill were repugnant to the Constitution as being in violation
of Article 40.3.2 and Article 43 protecting the property rights of the
citizen and/or Article 40.1 guaranteeing the equality before the law of
all citizens as human persons. It was submitted that other provisions
were in breach of Article 15.2.1 vesting the sole and exclusive power
of making laws for the State in the Oireachtas.

Counsel assigned by the court submitted that, in reaching a conclusion
as to whether Part V of the Bill violated any of these provisions of the
Constitution, it was important to bear in mind a number of features of
the legislation.

First, it was said that the definition of "eligible persons" was
in somewhat general terms. A person whose income was not adequate,
because of the specified criteria, to meet mortgage repayments for the
purpose of the accommodation he required, was not as a result
automatically qualified as

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an eligible person. The planning authority
were also entitled to take into account "any other financial
circumstances of the eligible person" and this, it was urged, gave
the planning authority a huge measure of discretion over a matter that
was ultimately fundamental in determining the amount of land which had
to be transferred to the planning authority. Planning authorities might
apply these provisions in a significantly different manner, thus leading
to an unevenness throughout the country as to the determination of
eligibility, which in turn was to be a major determinant of the amount
of land which had to be transferred on an application for permission. It
was said that this was particularly striking when one bore in mind that
the percentage relationship between mortgage payments and income was
fixed in a uniform way throughout the country. It was also said that the
imprecise definition of "accommodation needs" could result in
applicants for development being required to contribute to housing for
people who are better off than they were. That was not satisfactorily
met by s. 100(1)(a) enabling the Minister to make regulations specifying
the criteria for determining the size of accommodation required by
eligible persons.

Secondly, it was submitted that the fact that it was left to the
planning authority to determine the percentage of land - subject to the
maximum of 20% - to be transferred to the planning authority for the
purposes of social and affordable housing would lead to unjust and
anomalous consequences. Clearly, the requirements for such housing in
different areas of the country would differ for a variety of
socio-economic factors, including the fact that the State in the past
may have benefited some areas more than others and that some local
authorities had been less effective in meeting their obligations to
provide such housing under the Housing Acts. Thus, the specified
percentage to which an applicant for planning permission in a particular
area will be subject would be determined, not by his ability to
contribute to the social need, but by the neglect of housing authorities
in the past of their duties for which he was not certainly not
responsible. It was notable, in this context, that the planning
authority, in determining what the specified percentage should be and
how much land should be transferred in any particular instance to them
was not obliged to have any regard whatever to the financial
circumstances of individual applicants for permission.

Thirdly, it was submitted that the singling out of applicants for
permission for housing development for adverse treatment in order to
increase the supply of social and affordable housing was wholly
unjustifiable for a number of reasons. Those who simply retained a land
bank without making any attempt to develop it were not affected. Neither
were applicants for commercial development. Neither were those who made
substantial profits from the increase in house prices, such as builders,
builders' suppliers and financial institutions. One possible consequence
would be that commercial

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development would be encouraged at the expense
of the housing development which it was the policy of the legislation to
stimulate.

Fourthly, it was submitted that the method by which compensation was to
be assessed for land compulsorily transferred to the planning authority
was in many respects arbitrary and unfair. A person who had inherited
land twenty years ago would be forced to accept either its value as of
that date or its existing use value. In most cases, either valuation
would be far below that of land which had been acquired in the years
immediately preceding the publication of the legislation. No rational
basis could be put forward for such a differentiation. Similarly, those
who had bought land many years before the publication of the legislation
and who had very good reasons for not developing the land -e.g. because they wished to use it for farming - were heavily penalised
in comparison with those who bought the land at a time closer to the
relevant date.

Fifthly, it was submitted that these difficulties were compounded by the
absence of any payment for improvements carried out to the land by the
applicant and of any compensation for injurious affection to the
remaining land.

It was submitted that, while it was undoubtedly important and indeed
essential for the executive and the legislature to do everything within
their power to remedy the serious socio-economic problems resulting from
the high level of house prices now prevailing, it should not be done by
requiring one section of the population - owners legitimately wishing to
develop their land - to bear a disproportionate share of alleviating the
social ills in question. The transfer of the burden seemed to be based
on the premise that such landowners were reaping a benefit from the
increase in the value of their land brought about by rezoning decisions
and that it was reasonable to require them to accept some reduction in
those profits for the benefit of the community as a whole. That
approach, however, it was said, had insufficient regard to the other
factors which had contributed to the present high cost of housing. It
was accepted that the steep acceleration in the cost of houses over the
past decade not merely made it difficult for persons in the special
categories to obtain housing accommodation, but also put such
accommodation beyond the reach of persons with low or even moderate
incomes. But this was the result, it was urged, of a number of factors
for which landowners were not in any way responsible: the failure of
central government and local authorities to provide affordable housing
and the necessary infrastructure, the fact that wages had not kept pace
with the increase in house prices and the constraints imposed on such
wage increases by successive agreements between governments and various
interest groups. The inadequate supply of housing which, it was
acknowledged, was probably the most important feature in contributing to

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the present difficulties was a matter for society as a whole, and not
one for a somewhat arbitrarily selected group, to remedy.

While it was accepted that Part V, in common with the rest of the Bill,
was entitled to the presumption of constitutionality, it was submitted
that it violated the guarantees as to private property and equality
before the law contained in the relevant articles of the Constitution.

It was accepted by counsel assigned by the court that, in considering
the Bill, the court ought to apply the principle laid down in a number
of decisions of the court to the effect that, where it was claimed that
a bill is repugnant to the Constitution, such repugnancy must be clearly
established. It was further conceded that the objective of Part V,i.e. to provide housing for persons who either would have
difficulty in obtaining housing or would be unable to obtain housing if
left to rely on their own resources, was in the interests of the common
good. It was submitted that the first issue which the court had to
address was whether the relevant provisions providing for the compulsory
transfer of land, sites or houses to the local authority constituted an
unjust attack on property rights, having regard to the measure of
compensation provided for affected landowners. The second issue was
whether the relevant provisions were vitiated by invidious
discrimination to an extent which rendered them repugnant to the
Constitution. The third issue was whether the relevant provisions
delegating to the local authority and/or the Minister for the
Environment important critical decisions in regard to the compulsory
transfer provisions constituted an unauthorised delegation of
legislative power contrary to Article 15.2 of the Constitution.

It was submitted that, in considering whether Part V of the Bill
violated the guarantees as to private property in the Constitution, the
court should consider whether the indisputable delimitation of property
rights effected by these provisions operates in an arbitrary and/or
discriminatory fashion. The court would also have to consider whether
the measures adopted were proportional to the requirements of the common
good which it was sought to advance.

In considering those questions, the fact that the compensation to which
the applicant for permission would be entitled in respect of the land
which he was obliged to cede to the planning authority was not based on
the market value of the land was of critical importance. While it had
been held in Dreher v. Irish Land Commission [1984] I.L.R.M.
94, that the absence of a provision for the payment of compensation
based on the market value of the property being taken did not, of
itself, mean that the legislation was unconstitutional, that decision
was one of a series of decisions arising from the operations of the
Irish Land Commission from which no general principle could safely be
extracted. In contrast, it was submitted, that the

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absence of
compensation had been found to be fatal to the constitutionality of the
relevant legislation in Blake v. The Attorney General [1982]
I.R. 117. Similarly, the decision of the court in The Employment
Equality Bill, 1996 [1997] 2 I.R. 321 demonstrated that, while the
purpose of legislation might be laudable and intended to serve the
common good, it would be found to be unconstitutional if it sought to
transfer the burden of achieving that objective to a particular section
of the community in an unfair and discriminatory manner.

It was further urged that where this was done without compensation - or,
as in this case, compensation which fell significantly below the actual
value of the property taken - and without regard to the financial
capacity and needs of those being benefited and those adversely
affected, it constituted an unjust attack on the property rights of the
latter and could not be justified by reference to Article 43. In support
of this proposition, counsel relied on the decision of the court inBlake v. The Attorney General [1982] I.R. 117. In the present
case, it was said that the remarkably wide ranging category of"eligible persons" and the complete absence of any reference to
the financial circumstances of the affected landowners made the
reasoning of the latter decision peculiarly applicable. Moreover, where
a statutory scheme of this nature affecting property rights operated in
an inconsistent manner throughout the country, by reason of that fact it
also constituted an unjust attack on property rights, as had been held
by the court in Brennan v. The Attorney General [1994]
I.L.R.M. 355.

It was accepted that, as had been held in Dreher v. Irish Land
Commission [1984] I.L.R.M. 94 and also inO'Callaghan v. Commissioners of Public Works [1985] I.L.R.M.
364, the absence of compensation and a fortiori the absence of
compensation based on market value does not necessarily amount to an
unjust attack on private property. However, what distinguished the
present legislation was the combination of a significant disparity
between the compensation and market value and anomalies and inequities
in the way in which the scheme would operate. It was submitted that the
present scheme also offended the principle of proportionality which had
been developed in recent cases, such as Cox v. Ireland [1992]
2 I.R. 503 and In re The Matrimonial Home Bill, 1993 [1994] 1
I.R. 305 and which had been applied to the Articles protecting private
property by Costello P. in Daly v. Revenue Commissioners [1995]
3 I.R. 1.

It was further submitted that the statutory scheme violated the
guarantee of equality before the law. While it was accepted that, as had
been held in Quinn's Supermarket v. Attorney General [1972]
I.R. 1, the guarantee was not absolute in its nature, the somewhat
narrow construction of Article 40.1 which had been adopted in that case,
i.e. that the qualifying words "as human persons" indicated
that the inequality proscribed by the article was

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one based on
matters such as race, gender, religion or political opinions, had not
found favour in later decisions of the court such as McKenna v. An
Taoiseach (No. 2) [1995] 2 I.R. 10 and Howard v. Commissioners
of Public Works [1994] 1 I.R. 101. It was submitted that
inequalities which unfairly or arbitrarily restricted a person's
property rights or means of earning a livelihood or which made a person
unfairly bear a disproportionate share of a burden which should be
assumed by society as a whole were prohibited by Article 40.1. In the
present case, the legislation unfairly and invidiously discriminated
between landowners who proposed to develop their land for housing and
persons who do not intend to develop their land. The latter category may
simply be retaining the land as a long term investment without
developing it and thereby be conferring no benefit on society. Where
that person's land is compulsorily acquired for housing by a local
authority under the Housing Acts, he will have a right to compensation
at market value. The person who desires to develop land and make housing
available effectively pays a substantial penalty.

Counsel also relied on the different treatment for particular categories
of person in the assessment of compensation to which reference has
already been made as constituting further invidious discrimination.
Similar considerations applied to the failure to have any regard to the
relative financial circumstances of the developer and the persons
entitled to affordable housing and the different treatment of persons
applying for housing development and commercial development.

It was finally submitted by counsel assigned by the court that Part V of
the Bill violated the provisions of Article 15.2 vesting the sole and
exclusive power of making laws for the State in the Oireachtas. It was
accepted that the provisions of s. 94(5)(a)(vi), under which planning
authorities, in making an estimate of the requirement for affordable
housing are to have regard to certain specified matters and

"such other matters as the planning authority considers appropriate
or as may be prescribed for the purpose of this subsection"

were constitutionally valid. It was appropriate, it was said, that,
while the Minister retained a power to direct planning authorities to
take particular matters into account which had not been specified in the
legislation, the planning authority should also have a residual
discretion to have regard to matters which might be of particular
significance having regard to conditions in their area. Counsel,
however, contrasted that provision with s. 93(3) which enables the
planning authority to "take into account" the financial
circumstances of eligible persons or those who might reasonably be
expected to reside with them. Although a person in need of accommodation
whose net income would be inadequate to meet mortgage repayments as
determined under subs. (3) was prima facie treated as an

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eligible person, subs. (3) conferred on the planning authority a wide
discretion as to the other financial circumstances of the person
concerned which they could take into account. The complete absence of
any policy or principles in Part V as to how that discretion was to be
exercised clearly violated Article 15.2. The same considerations applied
to the failure to specify with precision what was meant by"accommodation needs" of eligible persons.

It was submitted that the constitutional frailty of s. 93(3) was not
cured by the power given to the Minister under s. 100(1) to make
regulations, since that power was confined to regulations

"governing the determination of income for the purposes of s. 93".

The significance of the wide-ranging powers thus vested in a planning
authority, counsel said, was that the list of eligible persons entitled
to affordable housing could become so large that the entire of the 20%
reserved for housing for the special categories or affordable housing
could be required in the case of every housing development, although
that was plainly not what was envisaged in the other provisions under
Part V.

These defects in Part V, counsel submitted, could have been avoided by
more precise statutory definitions of eligible persons which did not
leave so large an area of discretion to planning authorities.

The Attorney General, and counsel appearing with him, submitted that the
purpose of Part V of the legislation was two fold:-

(1) to enable as many people as possible to own their own houses;

(2) to ensure that, so far as possible, the least well off members of
society were not required by economic necessity to live in segregated
areas.

It was pointed out that the first objective had formed part of the
policy of successive governments since the foundation of the State and
that the failure to meet the second objective had given rise to grave
social problems in recent decades and that, in the case of the second
objective, it had also been the policy of successive governments for a
considerable period to bring it about.

It was submitted that, to the extent that the submissions of counsel
assigned by the court were based on the premise that the present
difficulties being experienced in the provision of affordable housing
were the result of inaction by central government or local authorities,
it was ill-founded. They said that the amount spent on what could be
broadly described as "social housing" had been increasing in
every year for the past four years and that it was proposed to expend
sums in the order of six billion pounds on such housing over the next
six years.

It was submitted that the development of the housing market has in
recent years created two inter-related problems. First, there has been
an

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increasing demand for social housing by reason of increased
population numbers and changes in society leading to more social units
requiring separate housing. It was said that the fact that this has
occurred at a time when the cost of land is relatively high means that
there is a decreasing stock of land for local authorities to acquire and
build upon. Secondly, the rapid increase in the cost of housing has
created particular problems for first time buyers. Such people need
affordable housing, it was said, to bridge the gap between what they can
afford and what is available on the market. This was demonstrated by the
increase in house prices in recent years resulting in a gap between the
mortgages which people can afford and their incomes. It was said that
failure to meet the increased demand for social housing would have
implications for wage demands and consequent economic dislocation and
would also threaten social cohesion.

It was submitted that the Bill, including Part V, enjoyed the
presumption of constitutionality. The court should not decide that Part
V of the Bill or any part thereof was repugnant to the Constitution
unless that repugnancy had been clearly established.

Article 43.2.1 recognised that the exercise of rights of private
property ought, in civil society, to be regulated by the principles of
social justice. It was apparently conceded by counsel assigned by the
court that the objectives already referred to were, in that context,
constitutionally permissible. The essential issue was as to whether, in
attaining those objectives, the Oireachtas was entitled to provide for
compensation in the manner prescribed by Part V or whether those
provisions constituted an "unjust attack" on the private property
rights of citizens within the meaning of Article 40.3.2.

It was submitted that, in approaching that question, it was essential to
bear in mind that the Bill, in providing for the payment of compensation
at a level which would admittedly be lower than the market value of the
relevant portion of the land as it would normally be determined on a
compulsorily acquisition, was doing no more than requiring the
landowner, if he wished to develop the land, to surrender some part of
the enhanced value of his property which had resulted from the operation
of a planning regime intended for the benefit of the community as a
whole. Thus, the impugned provisions operated only where a person
applied for permission to develop the land and related at most to 20% of
the land. Even in relation to that portion, there was no question of the
applicant not being compensated: instead, he was compensated at a level
which left out of account some of the enhanced value of the land
resulting from its being zoned for residential use. The submissions of
counsel assigned by the court amounted in effect to an argument that, in
the case of every interference with property rights, even where mandated
by the common good, the acquiring authority

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should be required to
compensate the owner at the level of market value. That was wrong in
principle and contrary to the jurisprudence of this court as reflected
in Dreher v. Irish Land Commission [1984] I.L.R.M. 94 andO'Callaghan v. Commissioners of Public Works [1985] I.L.R.M.
364. The provisions in the present case were clearly intended to ensure
that those who, quite legitimately, wished to realise the potential of
their land, should be required to contribute a relatively modest
proportion of the enhanced value resulting from planning decisions,
including the rezoning of the land to the attainment of an important
social objective. That was not only a permissible restriction on the
exercise of private property rights, but was also reasonably
proportionate to the end sought to be achieved, and hence could not be
said to constitute an unjust attack on property rights.

Cases such as Blake v. The Attorney General [1982] I.R. 117
and Brennan v. The Attorney General [1994] I.L.R.M. 355, were
clearly distinguishable, it was submitted, since in those cases it was
not simply the absence of compensation which fatally flawed the relevant
legislation. In Blake v. The Attorney General , there was no
provision whatever for compensation for the losses sustained by the
landlords and in addition the freezing of the rents, which was accepted
by the court as being a legitimate social objective in the context of
Article 43, had been effected in an arbitrary and a discriminatory
manner which could not be rationally justified. In Brennan v. The
Attorney General, the rating system had been demonstrated to be an
anomalous and anachronistic form of taxation imposed on property owners
which again could not be rationally justified. It was submitted that, in
the present case, the statutory scheme had been carefully designed so as
to ensure that the landowners who, as a condition of developing their
land for housing, were required to cede 20% or less of the land in order
to provide affordable housing or housing for special categories,
received at the minimum compensation equivalent to the existing use
value of the land. That constituted what could be described as the
essential value of the land and, at worst, what the owner was losing in
respect of that portion was some of the enhanced value deriving from
planning decisions taken for the benefit of the community. In addition,
care had been taken to ensure that those who bought land before the
provisions of the Bill were published got back at least what they had
paid for the land together with interest payments to reflect the
investment they had made in the land. In addition, the Bill sought to
ensure that relatively small scale development was not affected by its
provisions. Far from being arbitrary or discriminatory, it was submitted
that these provisions represented a rational and appropriate scheme of
compensation for the persons affected.

"2 The State shall, in particular, direct its policy towards securing
…

ii. That the ownership and control of the material resources of the
community may be so distributed amongst private individuals and the
various classes as best to subserve the common good."

As to the submission that these provisions also violated the
constitutional guarantee of equality before the law, it was submitted
this was not, and could never have been intended to be, an absolute
guarantee of equality in all circumstances. Even if it could be said
that the construction adopted of Article 40.1 in Quinn's
Supermarket v. Attorney General [1972] I.R. 1, was somewhat narrow,
it would be extending the application of the guarantee far beyond what
was envisaged to hold that the distinctions necessarily drawn by Part V
of the Bill between different categories of landowners offended the
guarantee of equality before the law.

As to the argument based on what was claimed to be the unequal treatment
afforded to landowners on the one hand and eligible persons on the other
hand, it was submitted that the Oireachtas had arrived at a fair and
reasonable balance between the competing interests involved. Clear
legislative guidelines had been given as to the basis on which persons
could be classified as eligible persons and, far from ignoring the
circumstances of individual landowners, care had been taken to exclude
entirely from the ambit of the Bill relatively small scale development.

As to the submission that the degree of discretion afforded to the
planning authorities violated Article 15.2 of the Constitution as being
an impermissible form of delegated legislation, it was said that this
was wholly unsupported by the decisions of this court and the High
Court. In Cityview Press v. An Chomhairle Oiliúna [1980] I.R.
381, the empowering legislation had not indicated what factors were to
be taken into account by AnCo in imposing particular levies on employers
and it was held by McMahon J. in the High Court that this did not offend
the provisions of Article 15.2. His decision to that effect had not been
appealed to this court. By contrast, in Laurentiu v. Minister for
Justice [1999] 4 I.R. 26, this court had found the power given to
the Minister for Justice to make orders in respect of aliens so wide
ranging as to constitute an impermissible abdication by the Oireachtas
of its legislative role. That could not conceivably be said to the
position in the present case.

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Conclusions

It was held by the former Supreme Court In re The Offences Against
the State (Amendment) Bill, 1940 [1940] I.R. 470, that a bill
referred to the court by the President pursuant to Article 26 enjoys the
same presumption of constitutionality as an Act of the Oireachtas. No
argument has been advanced to the court in this case that that view of
the law, which was reaffirmed in other references before the former
court and this court, was in any way erroneous. It follows, that what
has sometimes been called the "double construction" rule applies
and that, if in respect of any provision or provisions of Part V of the
Bill two or more constructions are reasonably open, one of which is
constitutional and the other is unconstitutional, it must be presumed
that the Oireachtas intended only the constitutional construction: seeMcDonald v. Bord na gCon (No. 2) [1965] I.R. 217. It also
follows that, in accordance with the decision of the court in East
Donegal Co-operative v. Attorney General [1970] I.R. 317, it is to
be presumed that the Oireachtas intended that any proceedings,
procedures, discretions or adjudications permitted, provided for or
prescribed by Part V of the Bill would be conducted in accordance with
the principles of constitutional justice and that any departure from
those principles would be restrained or corrected by the courts.

Articles 40.3.2 and 43

Article 43 of the Constitution under the heading "Private
Property" provides that:-

"1.1 The State acknowledges that man, in virtue of his rational
being, has the natural right, antecedent to positive law, to the private
ownership of external goods.

2 The State accordingly guarantees to pass no law attempting to abolish
the right of private ownership or the general right to transfer,
bequeath, and inherit property.

2.1 The State recognises, however, that the exercise of the rights
mentioned in the foregoing provisions of this Article ought, in civil
society, to be regulated by the principles of social justice.

2 The State, accordingly, may as occasion requires delimit by law the
exercise of the said rights with a view to reconciling their exercise
with the exigencies of the common good."

Article 40.3 provides that:-

"1 The State guarantees in its laws to respect, and, as far as
practicable, by its laws to defend and vindicate the personal rights of
the citizen.

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2 The State shall, in particular, by its laws protect as best it may
from unjust attack and, in the case of injustice done, vindicate the
life, person, good name, and property rights of every citizen."

The decided cases demonstrate that the interpretation of these Articles
and, in particular, the analysis of the relationship between Article
40.3.2 and Article 43 have not been free from difficulty.

At a comparatively early stage in the history of the Constitution, the
former Supreme Court in Buckley v. The Attorney General [1950]
I.R. 67, emphatically rejected the proposition that the effect of
Article 43 was merely to prevent the total abolition of private property
in the State. It was also made clear that the courts were entitled to
determine whether, in any particular case, a restriction of rights of
private property was required by the exigencies of the common good. The
finding by the court in a later case, Attorney General v. Southern
Industrial Trust Ltd. (1960) 94 I.L.T.R. 161, that the delimitation
of private property rights and the assessment of what the common good
required were "matters primarily for the consideration of the
Oireachtas" has been recognised in subsequent authorities as being
in conflict with the statement of the law in Buckley v. The
Attorney General and the former decision has not been followed: seeThe Central Dublin Development Association v. Attorney
General (1969) 109 I.L.T.R. 69 and Blake v. The
Attorney General [1982] I.R. 117.

In the latter case, which concerned a challenge to the constitutionality
of the Rent Restrictions Act, 1960, O'Higgins C.J. speaking for this
Court, drew the following distinction between the effects of Articles 43
and 40 at p. 135:-

"[Article 43] is an Article which prohibits the abolition of private
property as an institution, but at the same time permits, in particular
circumstances, the regulation of the exercise of that right and of the
general right to transfer, bequeath and inherit property. In short, it
is an Article directed to the State and to its attitude to these rights,
which are declared to be antecedent to positive law. It does not deal
with a citizen's right to a particular item of property, such as
controlled premises. Such rights are dealt with in Article 40 under the
heading 'personal rights' and are specifically designated among the
personal rights of citizens. Under Article 40 the State is bound, in its
laws, to respect and as far as practicable to defend and vindicate the
personal rights of citizens.

There exists, therefore, a double protection for the property rights of
a citizen. As far as he is concerned, the State cannot abolish or
attempt to abolish the right of private ownership as an institution or
the general right to transfer, bequeath and inherit property. In
addition, he

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has the further protection under Article 40 as to the
exercise by him of his own property rights in particular items of
property."

In that case, the court held that the legislation in question could not
be regarded as regulating or delimiting the property rights comprehended
by Article 43 and that, accordingly, its validity fell to be determined
solely by reference to the provisions of Article 40.3.2. The sole
question to be determined was whether the impugned provisions of the Act
of 1960, constituted an unjust attack on the property rights of the
plaintiffs.

It is clear, particularly when the later decisions of the court are
examined, that this approach cannot now be adopted without at least some
reservations. It is no doubt the case that the individual citizen who
challenges the constitutional validity of legislation which purports to
delimit or regulate the property rights undertakes the burden of
establishing that the legislation in question constitutes an unjust
attack on those rights within the meaning of Article 40. It is also
possible to envisage an extreme case in which the Oireachtas by some
form of attainder legislation purported to confiscate the property of an
individual citizen without any social justification whatever. In such a
case, no inquiry would be called for as to whether the legislation also
conformed to the requirements of Article 43. The challenge typically
arises, however, as it has done here, in circumstances where the State
contends that the legislation is required by the exigencies of the
common good. In such cases, it is inevitable that there will be an
inquiry as to whether, objectively viewed, it could be regarded as so
required and as to whether the restrictions or delimitations effected of
the property rights of individual citizens (including the plaintiff in
cases other than references under Article 26) are reasonably
proportionate to the ends sought to be achieved.

That the provisions of Article 43 are relevant to the inquiry undertaken
by the courts where they are considering a challenge to the
constitutionality of legislation on the ground that it constitutes an
unjust attack on the property rights of the citizen within the meaning
of Article 40 was made clear in the subsequent decision of this court inDreher v. Irish Land Commission [1984] I.L.R.M. 94, which it
will be necessary to consider at a later point.

The objectives sought to be achieved by Part V of the Bill are clear: to
enable people of relatively moderate means or suffering from some form
of social or economic handicap to buy their own homes in an economic
climate where housing costs and average incomes make that difficult and
to encourage integrated housing development so as to avoid the creation
of large scale housing developments confined to people in the lower
income groups.

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It can scarcely be disputed that it was within the competence of the
Oireachtas to decide that the achievement of these objectives would be
socially just and required by the common good. It is accepted on behalf
of the State that the use of planning legislation, which has
traditionally been concerned with the orderly and beneficial planning
and development of the physical environment, for a purely social
objective of this nature is novel and even radical. The court is
satisfied, however, that it is an objective which it was entirely within
the competence of the Oireachtas to decide to attain, as best it could,
by the use of planning machinery. The essential question for resolution,
in the context of Article 40 and Article 43, is whether the means
employed constitute an unjust attack on property rights.

That statutory scheme has been fully explained in the earlier part of
this judgment. It clearly envisages that a landowner who develops his
property for housing and who is not exempted by other provisions of Part
V will in general be required to cede up to 20% of the land to the
housing authority for the provision of houses at a price which reflects
the existing use of the land (normally agricultural value) and which,
accordingly, will be significantly below the market value of the land,
if by market value is meant the price which the property might be
expected to fetch if sold on the open market enjoying the same right to
develop as that enjoyed by the landowner in respect of the remaining 80%
or more of the lands in question. Compensation will, accordingly, be
paid for the undoubted restriction on the exercise by the landowner of
his property rights, but it will in that sense be compensation at a
level significantly short of its market value.

The approach which, in general, should be taken by the courts in
considering whether a constitutional right has been validly abridged
were stated as follows by Costello J., as he then was, in Heaney v.
Ireland [1994] 3 I.R. 593 in a passage subsequently approved by
this court at p. 607:-

"In considering whether a restriction on the exercise of rights is
permitted by the Constitution, the courts in this country and elsewhere
have found it helpful to apply the test of proportionality, a test which
contains the notions of minimal restraint on the exercise of protected
rights, and of the exigencies of the common good in a democratic
society. This is a test frequently adopted by the European Court of
Human Rights (see, for example, Times Newspapers Ltd. v. United
Kingdom (1979) 2 E.H.R.R. 245) and has recently been formulated by
the Supreme Court in Canada in the following terms. The objective of the
impugned provision must be of sufficient importance to warrant
overriding a constitutionally protected right. It must relate to
concerns pressing and substantial in a free and democratic society. The
means chosen must pass a proportionality test. They must:-

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(a) be rationally connected to the objective and not be arbitrary,
unfair or based on irrational considerations;

(b) impair the right as little as possible; and

(c) be such that their effects on rights are proportional to the
objective; see Chaulk v. R. [1990] 3 S.C.R. 1303, at pages
1335 and 1336."

"If the State elects to invade the property rights of the individual
citizen, it can do so only to the extent that this is required by the
exigencies of the common good. If the means used are disproportionate to
the end sought, the invasion will constitute an 'unjust attack' within
the meaning of Article 40, s. 3, sub-section 2."

In considering the application of these principles to Part V of the
Bill, it is important to bear in mind that, where the property of the
citizen is compulsorily acquired by the State or one of its agencies for
what are deemed by the legislature to be important social objectives, it
has in general been recognised that he or she is entitled to at least
the market value of the property so taken as constituting fair
compensation for the invasion of his property rights. However, that this
generally recognised right, although unquestionably of importance, is
not absolute was made clear in two decisions of this court.

In Dreher v. Irish Land Commission [1984] I.L.R.M. 94, it was
contended that the statutory provisions enabling the price to be paid by
the Land Commission for land compulsorily acquired to be paid in land
bonds equal in nominal value to the sum fixed by the judicial
commissioner was inconsistent with Articles 40 and 43 of the
Constitution. The facts in Dreher v. Irish Land Commission were
that the Land Commission had made a compulsory acquisition of
lands, the property of the plaintiff, in 1967. The price of the lands
had been fixed by it at the sum of £24,000 to be paid in 8% land bonds
equal in nominal amount to £24,000. The plaintiff appealed against the
order and the judicial commissioner fixed the price of the land at
£30,000 payable in 93/4% bonds equal in nominal value to £30,000. The
plaintiff did not want to take the land bonds and sought cash instead.
The Land Commission was only empowered to purchase for cash where land
was offered to it for sale under s. 27 of the Land Act, 1950, and when
there was a right to vacant possession and the Land Commission required
the land for the provision of new holdings. On the appointed day for the
purposes of the legislation, £30,000 worth in nominal value of 93/4% bonds
were placed to the credit of the plaintiff. He would

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have been entitled
to dispose of the bonds as from the moment he made title to the lands or
within three weeks or so of making title. At that date, the value of the
bonds was 98: they continued to fluctuate in value and at one stage
actually stood at 101.5. At the date of the trial, however, they had
fallen to 71.

This court unanimously rejected the plaintiff's claim that these
provisions were in violation of Articles 40 and 43. In the course of his
judgment, Walsh J. said at p. 96:-

"It does not necessarily follow that the market value of lands at any
given time is the equivalent of just compensation as there may be
circumstances where it could be considerably less than just compensation
and others where it might in fact be greater than just compensation. The
market value of any property whether it be land or chattels or bonds may
be affected in one way or another by current economic trends or other
transient conditions of society."

It was pointed out in that case that there was a statutory requirement
that the land bonds should be issued at a rate which kept them as near
as could be to par value during the period of the issue. As already
noted, during the currency of the period when they could have been
realised by the plaintiff, they actually stood at one stage above par.
The case, accordingly, should be regarded as one which was essentially
decided on its special facts, as Henchy J. made clear in a brief
concurring judgment.

The plaintiff in O'Callaghan v. Commissioners of Public
Works [1985] I.L.R.M. 364, had bought land at Loughshinny on the coast of
County Dublin which included a 381/2 acre site occupied by a prehistoric
promontory fort. This had been listed for preservation under the
relevant legislation, which also prohibited the owner from interfering
with the site without giving prior notice to the Commissioners of Public
Works. Soon after acquiring the land, the plaintiff, who was aware that
the land contained an ancient monument, employed contractors to plough a
part of the area occupied by the fort. The Commissioners then made a
preservation order which prevented the plaintiff from carrying out the
ploughing operations on the lands in question. The legislation contained
no provision for the payment of compensation in respect of such an order
and the plaintiff instituted proceedings claiming that this was an
unjust attack on the property rights of citizens within the meaning of
Article 40.3.2.

In the judgment of the court upholding the High Court decision refusing
the plaintiff's claim, O'Higgins C.J. said at p. 368 that:-

"the absence of such a provision for the payment of compensation to
him in respect of a limitation of use of which he was substantially on
notice before his purchase and which is a requirement of what should be
regarded as the common duty of all citizens - to preserve

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such a
monument, can be no ground for suggesting that the prohibition or
limitation is an unjust attack on his property rights. In short, by the
impugned statute as the occasion requires, the State, through s. 8,
delimits by law, not the right of private ownership or the general right
to transfer etc. but the exercise of those rights - in this instance the
user of land - so that that user will be reconciled with the exigencies
of the common good - here, the national aspirations as set out in the
Preamble and Article 1 of the Constitution."

Again, while the court held in that case that the absence of any
provision for compensation did not invalidate the imposition by statute
of the restriction in question, the fact that the plaintiff was aware of
the existence of such a restriction at the time that he acquired the
land seems to have played at least some part in the ultimate result.

There can be no doubt that a person who is compulsorily deprived of his
or her property in the interests of the common good should normally be
fully compensated at a level equivalent to at least the market value of
the acquired property. As Walsh J. in Dreher v. Irish Land
Commission [1984] I.L.R.M. 94 pointed out, even that may not be a
sufficient measure of compensation in some cases: hence the additional
elements of compensation payable in compulsory acquisitions of land
effected under the Land Clauses Consolidation Act, 1845, as determined
under the Acquisition of Land (Assessment of Compensation) Act, 1919, as
subsequently amended, by virtue of which the landowner is to be
compensated, not merely for the market value of his land, but also for
such additional elements of damage to him as disturbance, injurious
affection and severance.

There are, however, special considerations applicable in the case of
restrictions on the use of land imposed under planning legislation, such
as those now under consideration. Under the Local Government (Planning
and Development) Act, 1963 proposed to be repealed and re-enacted with
many modifications by the Bill, where the value of an interest of any
person existing in land to which a planning decision related was
reduced, the person was entitled to be paid by way of compensation the
amount of such reduction of value and, in the case of the occupier of
the land, the damage (if any) to his trade, business or profession
carried on the land. This prima facie entitlement to
compensation was, however, severely curtailed in a number of respects
and the validity of these provisions in constitutional terms was
considered in detail by Kenny J. in The Central Dublin Development
Association v. Attorney General (1969) 109 I.L.T.R. 69. He rejected
the contention that such limitations constituted an arbitrary
confiscation of such rights: he said that a provision, in particular
circumstances envisaged by the legislation, that an interference with
one of the rights of property was not to be the subject matter of
compensation was not

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a breach of Article 43 and did not fail to defend
and vindicate the personal rights of property. He also concluded that it
was not an unjust attack upon such rights.

Planning legislation of the nature now under consideration is of general
application and has been a feature of our law ever since the enactment
of the Town and Regional Planning Act, 1934, although it did not take
its modern, comprehensive form until the enactment of the Act of 1963.
Every person who acquires or inherits land takes it subject to any
restrictions which the general law of planning imposes on the use of the
property in the public interest. Inevitably, the fact that permission
for a particular type of development may not be available for the land
will, in certain circumstances, depreciate the value in the open market
of that land. Conversely, where the person obtains a permission for a
particular development the value of the land in the open market may be
enhanced. As Finlay C.J. observed in Pine Valley Developments v.
Minister for the Environment [1987] I.R. 23 at p. 37:-

"What the Minister [for Local Government] was doing in making his
decision in 1977 to grant outline planning permission to the then owner
of these lands was not intended as any form of delimitation or invasion
of the rights of the owner of those lands but was rather intended as an
enlargement and enhancement of those rights.

The purchase of land for development purposes is manifestly a major
example of a speculative or risk commercial enterprise. Changes in
market values or economic forces, changes in decisions of planning
authorities and the rescission of them, and many other factors,
indeed, may make the land more or less valuable in the hands of its
purchasers." [Emphasis added]

Decisions of the United States Supreme Court in this area are of limited
assistance, having regard to the significantly different terms of the
Fifth Amendment which simply provides that:-

"Private property [shall not] be taken for public use, without just
compensation."

However, it may be noted that in United States v. Fuller (1972)
409 U.S. 488, it was held that where the government had"condemned" - i.e. sought to acquire compulsorily -
certain lands, the assessment of compensation could legitimately be made
on the basis that an element of the value of the land arising from the
availability of grazing permits in respect of other land need not be
taken into account. Rehnquist C.J. speaking for the court said at p.
492:-

"These cases go far toward establishing the general principle that
the Government as condemnor may not be required to compensate a
condemnee for elements of value that the Government has created, or

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that
it might have destroyed under the exercise of governmental authority
other than the power of eminent domain [i.e. compulsory purchase]. If,
as in United States v. Rands (1967) 389 U.S. 121 the
Government need not pay for value that it could have acquired by
exercise of a servitude arising under the commerce power, it would seema fortiori that it need not compensate for value that it could
remove by revocation of a permit for the use of lands that it owned
outright."

In the present case, as a condition of obtaining a planning permission
for the development of lands for residential purposes, the owner may be
required to cede some part of the enhanced value of the land deriving
both from its zoning for residential purposes and the grant of
permission in order to meet what is considered by the Oireachtas to be a
desirable social objective, namely the provision of affordable housing
and housing for persons in the special categories and of integrated
housing. Applying the tests proposed by Costello J. in Heaney v.
Ireland [1994] 3 I.R. 593 and subsequently endorsed by this court,
the court in the case of the present Bill is satisfied that the scheme
passes those tests. They are rationally connected to an objective of
sufficient importance to warrant interference with a constitutionally
protected right and, given the serious social problems which they are
designed to meet, they undoubtedly relate to concerns which, in a free
and democratic society, should be regarded as pressing and substantial.
At the same time, the court is satisfied that they impair those rights
as little as possible and their effects on those rights are
proportionate to the objectives sought to be attained.

Nor in the view of the court could the scheme be regarded as arbitrary,
unfair or based on irrational considerations. It was reasonable to
differentiate between those persons who bought their land after the Bill
had been published and those who had bought before and to afford
somewhat more generous treatment to the latter category. The court is
further satisfied that it was not unfair or arbitrary to distinguish
between those who acquired land by purchase before August, 1999, and
those who acquired it by inheritance before that date. It is true that
the latter category are not to be entitled to interest, but there is
undoubtedly a distinction in principle between their position and that
of those who purchased property: it was not unreasonable to treat the
latter as being entitled to interest in respect of the purchase money
paid by them, whether in the form of mortgage interest or otherwise,
depending on the circumstances of the particular purchase. At the same
time, the impact of the statutory scheme is limited so that those
carrying out developments consisting of the provision of four or fewer
houses or housing on land of 0.2 hectares or less can obtain
certificates relieving them from the provisions of section 96. In
addition, as already noted, there are elaborate provisions enabling the
planning authority to

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"claw back" profits effected on the resale
of houses built in pursuance of the statutory scheme.

Support for the view that the statutory scheme set out in Part V of the
Bill does not constitute an impermissible violation of private property
rights is to be found in the decision of the European Court of Human
Rights in James v. United Kingdom [1986] 8 E.H.R.R. 123. In
that case the trustees of the Westminster Estate in London had been
deprived of the ownership of a number of properties forming part of the
estate through the exercise by tenants of those properties of rights of
acquisition conferred by the relevant English legislation. They
complained inter alia that the compulsory transfer of these
properties and the calculation of the price received for the transfer
amounted to a breach of Article 1 of Protocol No. 1 of the European
Convention on Human Rights and Fundamental Freedoms which reads:-

"Every natural or legal person is entitled to the peaceful enjoyment
of his possessions. No one shall be deprived of his possessions except
in the public interest and subject to the conditions provided for by law
and the general principles of international law.

The preceding provisions shall not, however, in any way impair the right
of a State to enforce such laws as it deems necessary to control the use
of property in accordance with the general interest or to secure the
payment of taxes or other contributions or penalties."

One of the grounds of challenge was that the Act deprived the applicants
of their property at a price "always below, and often far below the
market value".

Having found that the stated social objectives of the legislation in
question came within what is described in the jurisprudence of that
court as the "margin of appreciation" of the contracting state,
the court went on to find as follows at p. 147:-

"Like the Commission, the court observes that under the legal systems
of the contracting States, the taking of property in the public interest
without payment of compensation is treated as justifiable only in
exceptional circumstances not relevant for present purposes. As far as
Article 1 is concerned, the protection of the right of property it
affords would be largely illusory and ineffective in the absence of any
equivalent principle. Clearly, compensation terms are material to the
assessment whether the contested legislation respects a fair balance
between the various interests at stake and, notably, whether it does not
impose a disproportionate burden on the applicants.

The court further accepts the Commission's conclusion as to the standard
of compensation: the taking of property without payment of an amount
reasonably related to its value would normally constitute a

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disproportionate interference which could not be considered justifiable
under Article 1. Article 1 does not, however, guarantee a right to full
compensation in all circumstances. Legitimate objectives of 'public
interest' such as pursued in measures of economic reform or measures
designed to achieve greater social justice, may call for less than
reimbursement of the full market value. Furthermore, the court's power
of review is limited to ascertaining whether the choice of compensation
terms falls outside the State's wide margin of appreciation in this
domain."

It will be seen that the tests adopted by the European Court of Human
Rights in that case do not differ in substance from those which have
been applied by the courts in this jurisdiction in this area. The court
is satisfied that it has not been established that Part V of the Bill is
repugnant to Articles 40.3.2 and 43 of the Constitution.

In these circumstances, it is not necessary to express any opinion on
the submission advanced by the Attorney General that the court , in
deciding this reference, should have regard to the Directive Principles
of Social Policy set out in Article 45 of the Constitution. The court
notes that, in the High Court judgments where account was taken of the
Directive Principles, no question appears to have arisen of their
application in the making of laws by the Oireachtas. The question as to
whether those High Court decisions were correctly decided and, if so,
whether they should be followed in a case such as the present must await
resolution in another case.

Article 40.1

Article 40.1 provides that:-

"All citizens shall, as human persons, be held equal before the law.
This shall not be held to mean that the State shall not in its
enactments have due regard to differences of capacity, physical and
moral, and of social function."

"… this provision is not a guarantee of absolute equality for all
citizens in all circumstances but it is a guarantee of equality as human
persons and (as the Irish text of the Constitution makes quite clear) is
a guarantee related to their dignity as human beings and a guarantee
against any inequalities grounded upon an assumption, or indeed a
belief, that some individual or individuals or classes of individuals,
by reason of their human attributes or their ethnic or racial, social or
religious background, are to be treated as the inferior or superior of
other

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individuals in the community. This list does not pretend to be
complete; but it is merely intended to illustrate the view that this
guarantee refers to human persons for what they are in themselves rather
than to any lawful activities, trades or pursuits which they may engage
in or follow."

It has been suggested by some commentators that this is a somewhat
narrow construction of the guarantee of equality contained in Article
40, but for reasons which will shortly appear, the court is satisfied
that it is unnecessary in the present proceedings to consider whether
those criticisms are well founded.

The arguments advanced by counsel assigned by the court under this
heading necessarily overlapped to a considerable extent with those
advanced by them in relation to the private property articles. The court
has already rejected the argument that the legislation unfairly and
invidiously discriminates between landowners who propose to develop
their land for housing and persons who do not intend to develop their
land. It has also rejected arguments based on the different treatment
for particular categories of person in the assessment of compensation.

It was also urged that the general scheme of Part V discriminated
invidiously and unfairly between the affected landowners and the persons
benefiting from the scheme and that the result was to require some
people to bear a disproportionate share of what should be the
responsibility of society as a whole.

The court is satisfied that these arguments are not well founded. The
fact that a particular planning scheme may result in the conferring of
benefits on some categories of persons seen by the Oireachtas as being
in particular need of assistance and that this is done at the expense of
landowners who are benefiting financially from related planning
decisions can be said to be a form of unequal treatment. However,
Article 40 does not preclude the Oireachtas from enacting legislation
based on any form of discrimination: as has often been pointed out, far
from promoting equality, such an approach would simply result in greater
inequality in our society. As Barrington J. pointed out in Brennan
v. The Attorney General [1994] I.L.R.M. 355, in a passage
subsequently approved by this court in The Employment Equality
Bill, 1996 [1997] 2 I.R. 321, where classifications are made by the
Oireachtas for a legitimate legislative purpose, are relevant to that
purpose and treat each class fairly, they are not constitutionally
invalid. The court is satisfied that, in the present case, the
Oireachtas in its legislation has met those requirements.

It should be pointed out that, in reaching that conclusion, the court
has had regard to the observation by Kenny J. in Ryan v. The
Attorney General [1965] I.R. 294, that the presumption that every
Act of the Oireachtas is

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constitutional until the contrary is clearly
established applies with particular force to legislation dealing with
controversial social and economic matters. It is peculiarly the province
of the Oireachtas to seek to reconcile in this area the conflicting
rights of different sections of society and that clearly places a heavy
onus on those who assert that the manner in which they have sought to
reconcile those conflicting rights is in breach of the guarantee of
equality.

The court is satisfied that it has not been established that Part V of
the Bill is repugnant to Article 40 of the Constitution.

Article 15.2

Article 15.2.1 of the Constitution provides that:-

"The sole and exclusive power of making laws for the State is hereby
vested in the Oireachtas: no other legislative authority has power to
make laws for the State."

In Cityview Press v. An Chomhairle Oiliúna [1980] I.R. 381
O'Higgins C.J., speaking for the court, explained the criteria for
determining whether a delegation of legislative power is permissible
under that Article at p. 399 as follows:-

"In the view of this Court, the test is whether that which is
challenged as an unauthorised delegation of parliamentary power is more
than a mere giving effect to principles and policies which are contained
in the statute itself. If it be, then it is not authorised; for such
would constitute a purported exercise of legislative power by an
authority which is not permitted to do so under the Constitution. On the
other hand, if it be within the permitted limits - if the law is laid
down in the statute and details only are filled in or completed by the
designated Minister or subordinate body - there is no unauthorised
delegation of legislative power."

In the present case, it is undoubtedly envisaged in the statutory scheme
that some matters are to be determined either by planning authorities in
relation to their particular areas or by the Minister for the
Environment.

As already noted, counsel assigned by the court submitted that the
requirement in s. 93(3) that a planning authority, in determining the
eligibility of a person for the purposes of Part V, should take into
account "any other financial circumstances" of the eligible
person and persons who might reasonably be expected to reside with them
had left a huge area of discretion to the planning authority which
violated the provisions of Article 15.2.

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In the light of the applicable legal principles to which reference has
already been made, the court is unable to accept that proposition. The
general policy of the Act is clear: it is that what is called"affordable housing" should be made available under the machinery
provided in Part V to persons defined as "eligible persons".Subsection (3)(b) does no more than allow the planning authority to take
into account other financial circumstances of particular persons who
might come within the category of "eligible persons" and the
Oireachtas, in the view of the court, was fully entitled, having laid
down the general policy of the Bill in this context, to allow additional
matters relating to particular applicants to be dealt with at the
discretion of the planning authorities.

The Court is satisfied that it has not been established that the
provisions of Part V of the Bill are repugnant having regard to Article
15.2 of the Constitution.

Decision

The decision of the Court is, for the reasons stated, that none of the
provisions of Part V of the Bill are repugnant to the Constitution.

The President will be so informed.

I certify this to be the judgment and decision of the Supreme Court
pronounced on the 28th August, 2000.

Solicitor instructing counsel assigned to argue against the Bill:Ward McEllin.